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The growing number of firms leveraging social media ads highlight the urgent need for firms to understand social media ads and their effects on consumer perceptions and attitudes. This research examines whether and how different types of social media ads exert influences on ad engagement and how consumers’ psychological characteristics including regulatory orientation and lay rationalism moderate the influence of social media ads on ad engagement.

This research conducts three quasi experiments featuring two types of social media ads – interactive and transactional – to collect empirical evidence. Results are analyzed using ANOVA and Process in SPSS.

This research reveals that interactive ads lead to higher perceived enjoyment and perceived responsiveness, which further lead to higher ad engagement. Promotion focus moderates the effect of social media ads (interactive vs transactional ads) on perceived enjoyment and perceived responsiveness, and lay rationalism moderates the effect on perceived responsiveness, while prevention focus has no such effect.

First, this research establishes the connection between ad types and ad engagement in social media, which offers a new perspective to understand ad engagement. Second, it explores the underlying mechanisms of processing different types of social media ads. Third, it justifies the moderating effects of consumers’ regulatory orientation and lay rationalism on the effects of ad types on ad engagement, providing the first evidence on the moderating role of consumers’ lay rationalism in ad processing. This research helps firm marketers to fine-tune their social media ads according to consumer characteristics.